Sandy Gives Big Banks Some Humanity


Ever since the financial crisis four years ago, many ordinary Americans have felt like Wall Street banks took their bailout money and proceeded to continue operating their businesses as usual, taking advantage of every opportunity to nickel-and-dime their customers with frustrating fees. Combine that with stricter loan guidelines that prevented many people from getting financing when they most needed it, and a large mass of people gave up on banks entirely, leading to movements like Bank Transfer Day and general anti-big bank sentiment.

But while the worst recession in decades wasn't enough to make big banks relent in their pursuit of income, Hurricane Sandy apparently gave them pause. As a result, several banks have stepped up to make things easier for their customers during their current time of need, waiving much-hated fees in an effort to build goodwill and avoid resentment for charges that in many cases are entirely outside customers' control at the moment.

Doing the Right Thing

Banks are stepping up with a number of initiatives that will give their customers at least some relief from the disruption of Hurricane Sandy. Here are just a few:

  • Most banks charge their customers when they use ATMs that are outside their proprietary network. But Citigroup (C) , Wells Fargo (WFC) , and TD Bank (TD) are among the institutions waiving out-of-network ATM fees for customers in areas affected by the storm.

  • Overdraft fees have gotten to be extremely expensive for customers who bounce checks. JPMorgan Chase (JPM) is waiving overdraft fees as well as any charges associated with using overdraft protection services.

  • Late-payment fees for credit cards and consumer loans can not only be costly but can also have a negative impact on your credit. But Chase, Citi, and Wells Fargo are waiving those fees at least through Nov. 1.

  • Other banks, including Bank of America (BAC) and Capital One (COF), are addressing fee issues as they arise.

Good for Them, Good for Us

All this sounds like the right thing for banks to do for their customers. But it's also good business for them.

Many major banks, especially those headquartered in New York City, are facing major internal disruptions at the moment. Banks with customer service call centers in areas affected by the storm are short-staffed at exactly the time when their customers will put the greatest demands on them. Many unusual situations will likely tax the ability of rank-and-file customer service representatives and their supervisors to address customer needs.

Given those challenges, the last thing that banks need is for customers to bombard them with calls asking for minor fees to be waived. Yet that's exactly what many irate customers would likely do without the waivers, potentially creating yet another public relations disaster for banks at a critical time for the industry. By giving up a little fee income now, banks are saving themselves from a major headache down the road -- and perhaps building a little goodwill in the process.

Be Smart with Your Accounts

Of course, just because banks are being kind with their policies doesn't mean you should count on them always to do the right thing. The best way to deal with fees is to avoid doing whatever it is that incurs them -- and if you can't, find a bank that won't charge you for that behavior. With many banks not only choosing not to charge fees for out-of-network ATMs but also refunding the fees that the ATM operators themselves often tack on, there's really no excuse for dinging yourself $3 to $5 each time you need to grab cash on the run.

With money as tight as it is right now, fees aren't something you can really afford to pay. Banks continue to rely on fees for a big chunk of their overall income, but with a little effort, you don't have to rely on their occasional benevolence in order to avoid paying fees yourself.

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Tune in every Monday and Wednesday for Dan's columns on retirement, investing, and personal finance. You can follow him on Twitter @DanCaplinger.

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